A Lesson in Tech Survival

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One of the most boring companies in tech offers lessons on how superstars like Google and Facebook could manage to weather government lawsuits and other existential threats.

I’m talking about computer chip maker Qualcomm, who named a new boss on Tuesday and appears to have weathered endless crises that many people – myself included – thought could bring the company to a standstill.

Qualcomm could open a path for other tech companies now facing what they’ve been through: widespread litigation threats, potential new regulations, uncertain finances, and the howls of many business partners.

The company has shown that with enough patience, money, lawyers, luck, and products that people really need, it is possible to stay on course and emerge relatively unscathed from years of drama.

This is either an encouraging survival story or a depressing lesson rich businesses can use to overcome their problems. Maybe a little of both?

If you are not familiar with Qualcomm, simply know that without the company, there would be no digital life as we know it. Responsible for connecting smartphones to the internet, Qualcomm’s technology has been one of the top tech companies for years that you probably never think about.

But Qualcomm has also been consistently on the edge of a cliff for making money in ways it made few friends. Most of its profits come from charging smartphone companies like Samsung and Apple for using Qualcomm’s patented technology.

Smartphone makers usually have to pay Qualcomm for its patents, whether they buy their chips or not. The fee is usually based on the phone’s retail price, if any.

Many of Qualcomm’s largest customers – including Apple – and so many governments that I lost the count, have said that Qualcomm’s pricing and business tactics were unusual, and that the company unjustly bullied customers and mowed down competitors.

All of these battles could have forced the company to split up or perhaps even go broke. Qualcomm claimed that its behavior was fair and appropriate. And the company was largely confirmed.

The company’s new CEO is handling much of the litigation behind it, and Qualcomm is poised to be a winner in the next generation of smartphones with 5G cellular connections.

My colleague Don Clark, who knows more about computer chip companies than 99.9 percent of the people, also said he was surprised Qualcomm overcame its challenges.

“I think Qualcomm is sitting nicely,” Don told me. He added the caveat that he was wrong many times about Qualcomm, and the company is still battling some legal battles and facing competition from smartphone companies, including Apple, who are making more of their own computer chips.

Economy & Economy

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Jan. 6, 2021, 1:10 p.m. ET

What happened to Qualcomm is in some ways unique to this strange company, but it also has echoes in the battles that are now mounting over tech giants like Google, Facebook and Apple. As with Qualcomm, the question that haunts these superpowers is whether they succeed because they are good at what they do or because the companies rigged the system.

Qualcomm also showed a snowball effect of controversy. When a government or business partner began to question Qualcomm’s fees and business tactics, it encouraged other regulators, customers, and critics to focus on them as well. We see that now with the technology giants.

I don’t expect big tech like Qualcomm to emerge largely unscathed and unchanged from antitrust lawsuits and other struggles. But this company reminds me that the sound and anger about whether a company cheats to win might not matter that much in the end.

When a group of Google employees announced this week that they had formed a union to have more muscle negotiating workplace issues like sexual harassment and technical ethics, I thought it was a good time to pay employees in America Review tech power plants.

The numbers show both the sizable fortunes of some technicians compared to most Americans and the wide differences between companies. There are also a lot that leave out these numbers.

These are the most recent annual compensation figures for the typical employee in these companies, from documents released for annual general meetings of shareholders:

Alphabet (Google’s parent company): 258,708 USD

Facebook: $ 247,883

Microsoft: $ 172,142

Apple: $ 57,783

Amazon: $ 28,848 ($ 36,640 for full-time workers in the US)

By comparison, the typical full-time wage in the US was around $ 52,000 in 2019. Aside from Amazon, these companies only report the wages charged by their global workforce. *

One thing that pops out is the relatively low compensation from Apple and Amazon compared to the rest of Big Tech. (Amazon has more information on workplace benefits here that aren’t included in the pay count.)

An important reason for this is the composition of the company’s employees. Apple has a large number of employees in its retail stores. A large portion of Amazon’s rapidly growing global workforce of more than 1.2 million employees are employees who work in warehouses and package sorting centers. Google and Facebook employees are mostly office workers in relatively high-paying jobs like engineers.

The big gap in these pay metrics is the shadowy contractor workforce at pretty much all big tech companies. At Google, for example, direct employees are numerically among the temporary workers and contractors who tend to earn less and have fewer opportunities for advancement than the company’s full-time employees.

How the tech giants pay and treat their contract workers will be a big problem in 2021, and my colleagues and I will continue to monitor this closely.

* These numbers are all medians, which means that numerically half of the employees earn more and half less.

  • Technology that will be big in 2021: My colleague Brian Chen has more predictions for technologies that will invade our lives this year, including smarter WiFi that could improve our home internet browsing.

  • The drama about big tech in China: One of China’s most successful tech companies, Ant Group, is under fire both at home and in the US. China’s Wall Journal wants Ant to feed tons of financial data into a nationwide credit reporting system, the Wall Street Journal reported. And the White House ordered a ban on Ant’s mobile payment system in the US.

  • Please don’t steal cars: But it is wild that technologies like key fobs that were supposed to prevent car theft are now contributing to an increase in the number of stolen vehicles, wrote my colleague Sarah Maslin Nir. Part of this is because we have a tendency to leave the key fobs in our cars.

Five school buses in Utah synchronized their lights in time with the “Dance of the Sugar Plum Fairy” from the Nutcracker Ballet.

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